♦️ What does a declining dollar price mean?
When the dollar price declines, it means that the value of the US dollar is decreasing compared to other currencies. In other words, you can buy fewer foreign currencies (like euros, Japanese yen, Canadian dollars, etc.) with the same amount of US dollars.
♦️ What is the impact of a declining dollar?
Imports become more expensive: When the value of the dollar weakens, imported products and services to the United States become more costly for American consumers.
Exports become cheaper: Conversely, American products and services become cheaper for foreign buyers, which may boost American exports.
Gold and oil prices: Commodity prices denominated in dollars (such as gold and oil) often rise when the dollar falls, as they become cheaper for holders of other currencies.
♦️ What are the reasons for the decline of the US dollar?
According to Bloomberg, the reasons for the decline of the US dollar are against the backdrop of Trump's new threats to impose a 25% tariff on European Union products and Apple.
These threats raise concerns among investors as they could negatively impact the US economy, reduce the volume of global trade, and increase trade tensions.
In addition to the tax bill being considered by the Senate, which is expected to add hundreds of billions of dollars to the federal deficit annually.
The increasing financial deficit means that the US government is spending more than it earns, which is seen as a sign of the country's weak financial health, reducing the appeal of the dollar as a safe currency.
Data shows that hedge funds, asset managers, and speculative traders are increasingly betting against the dollar (i.e., expecting its value to decline).
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